The More Things Change? Delaware Supreme Court Applies Business Judgment Standard of Review in Going-Private Transaction

On March 14, 2014, the Delaware Supreme Court issued its decision in the widely followed case Kahn v. M&F Worldwide Corp. (“M&F Worldwide”), providing a blueprint for a controlling stockholder of a Delaware corporation to do a going-private transaction without subjecting the deal to “entire fairness” review by the courts, but instead the less exacting “business judgment” standard. The Supreme Court held that the business judgment standard will “govern mergers between a controlling stockholder and its corporate subsidiary, where the merger is conditioned ab initio upon both the approval of an independent, adequately-empowered Special Committee that fulfills its duty of care; and the uncoerced, informed vote of a majority of the minority stockholders.”